TKR
The Timken Company
$142.36
Stable Earnings Power
65%
P/Adj-EPS × Normalized Multiple
Strong
·
Conviction
Overvalued
Trading 52.8% above fair value
You pay
$142.36
Bear
$74.56
Fair
$93.20
Bull
$111.83
Bear
$74.56
-47.6%
$5.21 × 12x P/E
Fair
$93.20
-34.5%
$5.21 × 15x P/E
Bull
$111.83
-21.4%
$5.21 × 18x P/E
Key Value Driver
Normalized P/E multiple (15x base case)
Implied Market Multiple
27.3x
Summary
Our base-case estimate uses a valuation based on adjusted earnings per share and a normalized price-to-earnings multiple. We then blend that result with the average analyst price target of $138.33 from 24 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $93.20 per share.
Warnings
Dividend-based valuation: $29.71 (below our primary estimate by 62%). Large gaps may signal the dividend doesn't reflect full earning power.
Wall Street's average price target is $138.33 (from 24 analysts). Our estimate is 44% below the consensus -- consider that gap carefully.
Key Risks
- Growth DCF inappropriate — terminal value assumptions dominate
- EV/EBITDA misleading for regulated businesses where capex is mandated
- Regulatory risk is a fat tail not visible in normal multiples